Major industrial firms’ profits edge up in April: NBS

A worker debugs a special robot at a workshop in the Tangshan Hi-tech Industrial Development Zone in Tangshan, north China's Hebei Province, July 17, 2020. (Photo/Xinhua)

Profits made by China's major industrial companies edged up in April, with high-tech manufacturers posting very strong gains, which underscores the Chinese economy's resilience and ongoing structural upgrade, data from the National Bureau of Statistics (NBS) revealed on Tuesday.

Net profits of major enterprises above the designated size rose by 3.0 percent year-on-year in April, up by 0.4 percentage points from March, the NBS said. In the January-April period, these companies achieved a 1.4-percent profit increase, 0.6 percentage points faster than in the first quarter. Among 41 major industrial sectors, 23 reported profit growth, and nearly 60 percent reported improving income.

The high-tech manufacturing sector emerged as a leading driver of growth, with profits surging 9.0 percent in the first four months, accelerating by 5.5 percentage points from the first quarter and outpacing the average for all manufacturers.

Key growth areas included bio-medicine, aircraft manufacturing and semiconductor equipment production. The "AI Plus" initiative and the country's across-the-board digital transformation helped drive robust growth.

The semiconductor special equipment manufacturing sector saw a remarkable 105.1 percent surge, while electronic circuit production and integrated circuit manufacturing registered notable increases of 43.1 percent and 42.2 percent.

Meanwhile, smart automotive equipment manufacturing witnessed an astonishing 177.4 percent profit spike. The drone manufacturing sector achieved a significant 167.9-percent profit leap, and the wearables manufacturing industry posted an impressive 80.9-percent profit increase.

The equipment manufacturing sector also performed strongly, with profits up 11.2 percent in the first four months, contributing significantly to overall industrial growth, the NBS said.

Government policies, including a large-scale equipment renewal program and a consumer trade-in program, further backed economic growth. Specialized and general equipment manufacturing profits rose 13.2 percent and 11.7 percent, while the home appliance sector's profits expanded more than 15 percent due to policy stimulus.

"In general, the steady recovery of industrial profits of major enterprises from January to April demonstrates strong resilience and shock-absorbing capacity," said Yu Weining, an NBS statistician, in a press release.

"Given the uncertainties in the external environment and domestic constraints like insufficient demand, in the coming months, we need to promote the integrated development of scientific and industrial innovation, optimize and adjust the industrial structure, and accelerate the transformation and upgrading of traditional industries, while cultivating and strengthening emerging industries," Yu said.

China's industrial sector has shown remarkable resilience with 3.0-percent profit growth in April and a broadening recovery across nearly 60 percent of industrial categories, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Tuesday.

"The standout performance of the high-tech and equipment manufacturing sectors, growing at 9.0 percent and 11.2 percent, underscores China's successful industrial upgrading path," Wang said.

The expert emphasized multiple sustaining factors for industrial growth. "Continued policy support provides crucial buffers against global headwinds. Simultaneously, equipment renewal and consumer upgrade policies are generating sustained demand across industrial chains. Most significantly, the ongoing AI-powered manufacturing transformation is creating new growth frontiers, with particularly strong momentum in semiconductors and smart device production," Wang added.

This year, China's industrial growth has remained robust, serving as a key pillar for stable economic expansion. In April, the value-added output of industrial enterprises above the designated size grew by 6.1 percent year-on-year, with more than 80 percent of the 41 major industrial sectors reporting growth.

Fu Linghui, a spokesperson for the NBS, attributed the steady industrial growth to sustained macroeconomic policy support, domestic demand stimulation from large-scale equipment renewals and consumer goods trade-in projects, and enhanced innovation-driven industrial upgrades. Moving forward, the industrial sector is expected to advance toward high-end, intelligent, and green development, fostering new quality productive forces, Fu said.

Local governments across China are also intensifying and expanding incentives for large-scale equipment renewals and consumer goods trade-ins, streamlining processes and enhancing services to invigorate the market and unlock consumption potential, CCTV reported.

For example, North China's Hebei Province has broadened its consumer goods trade-in program, adding four categories of home appliances like microwaves and water purifiers, along with eight small appliance types such as coffee machines and floor cleaners. This year, Hebei has utilized more than 20 billion yuan ($2.78 billion) in subsidy funds for home appliance trade-ins, generating sales exceeding 10 billion yuan.

From January to April, more than 34 million consumers participated in the trade-in program for home appliances. They purchased more than 51 million units of 12 categories of home appliances in total, driving sales of 174.5 billion yuan, the MOFCOM said last Thursday.